FFC: GIDC resolution holds the key, upside triggers remain; Neutral
- We tweak our estimates for FFC with a new Dec’18 TP of PRs101/sh, backed by slightly higher Urea prices in CY18, 10% cut in DAP offtakes for CY19/20F and settlement of GIDC/subsidy accruals by CY19F.
- Recent developments on water scarcity has reportedly unfolded an alarming situation in Sindh and Punjab, especially for sugarcane and rice crops. We believe negative implications would be mostly visible in P/K nutrient offtakes (DAP/NP/NPK), following healthy demand trends witnessed in last 5yrs and rising international prices.
- Despite aforementioned concerns, rise in Urea pricing beyond PRs1,500/bag and potential favorable outcome of GIDC would be key upside triggers to our estimates, resulting in valuation upside of at least PRs22/sh or 22% to our TP in a bull case scenario.
Fauji Fertilizer is engaged in the manufacturing, purchasing and marketing of fertilizers including the investment in other fertilizer manufacturing operations. As of Dec 31 2004, Co. had a design capacity of 2,455,000 tonnes for urea production and 445,000 tonnes for DAP production.
Intermarket Securities Limited (IMS) is a full service corporate brokerage firm based in Karachi, Pakistan. We service both domestic and international clients. IMS was ranked #2 Best Local Brokerage and #3 Best for Overall Country Research for 2016 by AsiaMoney.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.